PAPUA New Guinea’s sovereign credit outlook has been upgraded to “Positive” by both international ratings agencies Moody’s and S&P Global Ratings, according to Treasurer Ian Ling-Stuckey, who described the development as recognition of the country’s recent economic reforms.
The Treasurer said Moody’s revised its outlook on July 27, following a similar move by S&P on June 19. While neither agency changed PNG’s sovereign credit rating, a positive outlook indicates the potential for a future ratings upgrade if economic conditions continue to improve.
Ling-Stuckey attributed the improved outlooks to the government’s fiscal consolidation efforts, reforms under the International Monetary Fund (IMF) programme, and measures aimed at strengthening economic institutions, improving foreign exchange availability and maintaining low inflation.
He said the national budget deficit had been reduced from 8.9 percent in 2020 to 2.2 percent in 2025, with the government targeting a budget surplus by 2027.
In its assessment, Moody’s said the positive outlook reflected “tangible ongoing progress in fiscal consolidation” supported by the IMF, international financial institutions and bilateral partners, including Australia. The agency also pointed to improvements in foreign exchange access and higher international reserve levels.
S&P similarly cited ongoing economic reforms, while noting that continued progress would be necessary to support any future upgrade in the country’s sovereign credit rating.
Both agencies also warned that reform momentum would need to be maintained. Moody’s said a reversal of fiscal consolidation or weaker implementation of macroeconomic reforms could place downward pressure on the rating. S&P said it could revise the outlook back to stable if anticipated improvements fail to materialise as the IMF programme concludes.
The Treasurer said the assessments demonstrated growing international confidence in Papua New Guinea’s economic management and noted that further upgrades would depend on sustained reforms beyond the current IMF programme and through the electoral cycle.
He also used the announcement to contrast the current government’s economic policies with those of previous administrations, arguing that continued reform would be essential to maintaining investor confidence.
Credit ratings and outlooks are closely monitored by investors as they influence perceptions of a country’s creditworthiness and can affect future borrowing costs.